External Stakeholders

External stakeholders are the representation of people, groups or organizations outside an organization with a particular or overall concern about the operations, activities, or results. They comprise customers, suppliers, investors, regulators, community members as well as any other entity which is touched by an organization's actions and operations. External stakeholders generally have different motivations and objectives that sometimes could clash with those of the organization. One of the primary responsibilities is to manage relationships with external stakeholders effectively in order to maintain reputation, compliance and for the long-term success of your business.

Example of External Stakeholders

For example, ABC, the manufacturer company, which is dependent on the many external stakeholders to support its operations. Customers being the chief external stakeholder for ABC Corp. since they are the ones who purchase its products. Suppliers provide the firm with raw materials and components necessary for producing goods. Investors, for instance, shareholders and creditors, fund investments and growth through financial support. Regulators prescribe laws and rules that ABC Corp. need to adhere to in order to function lawfully and ethically. People living close to ABC Corp.'s plants may raise concerns regarding environmental impact and corporate social responsibilities. Through their interaction with external stakeholders, ABC Corp. will develop trust, reduce risks, and generate mutually beneficial relationships that are vital to the company’s growth.